U.S. Brings in Verrilli to Defend Affordable Care Act

Verrilli, now a partner at Munger, Tolles & Olson, isn't stepping into entirely new territory: He successfully defended the ACA in the U.S. Supreme Court's 2012 ACA case NFIB v. Sebelius.

The "individual shared responsibility" section of the PPACA requires many people to hold what the government classifies as "minimum essential coverage," or solid major medical coverage, or else pay a penalty. The federal Tax Cuts and Jobs Act of 2017 (TCJA) zeroed out the PPACA individual mandate penalty.

In 2012, the Supreme Court held that the ACA individual mandate was exempt from legal challenge because it was a tax. The U.S. Constitution lets Congress imposes taxes, and a federal law prohibits parties from suing to get injunctions against new federal taxes, the court ruled.

In December, O'Connor, the judge handling the Texas case, ruled that the TCJA provision zeroing out the PPACA individual mandate turned the provision into a requirement to buy commercial health insurance. Congress has no authority to make people buy commercial products, the judge ruled.

The plaintiffs contend that a court ruling invalidating any part of PPACA should invalidate the entire statute, because the statute lacks any clause that provides for the rest of the statute to survive if one part dies.

The U.S. Department of Justice has tried to sever the individual mandate and other PPACA provisions related to medical underwriting and pricing from the rest of PPACA. It has declined to defend the individual mandate, medical underwriting or pricing provisions.

O'Connor agreed with the plaintiffs and found all of PPACA to be invalid. He stayed the effects of his ruling while the ruling is being appealed to the 5th Circuit.

A coalition of states, led by California Attorney General Xavier Becerra, is trying to defend the law. That coalition filed a notice of appeal Thursday.

Verrilli and Letter asserted that the Justice Department's refusal to defend part of PPACA opened the door for the House intervention. They wrote: "[F]ederal law provides that the Attorney General has a right to intervene in litigation to defend the constitutionality of an Act of Congress when the United States or one of its agencies or officers is not already a party, and it empowers the House and/or the Senate to intervene to defend a statute if the Attorney General fails to do so."

At the very least, they contend, their defense would address the same legal questions being litigated in the case, and their participation would cause "no undue delay or prejudice to the Court or the parties."

— Read Severability Replaces Broccoli in the Sights of Legal Scholars, on ThinkAdvisor.

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